The Wall Street Journal reported on Monday that Amazon is in discussions to invest in regional sports programming company Diamond Sports, a move that would enhance the e-commerce giant's ambitious drive into sports entertainment.

According to the source, Diamond Sports Group, which transmits the games of more than 40 major sports teams throughout the United States and declared bankruptcy earlier this year, is actively discussing with Amazon about a strategic investment and a multi-year streaming relationship.

(Photo : by SEBASTIEN BOZON/AFP via Getty Images)
The Wall Street Journal reported on Monday that Amazon is in discussions to invest in regional sports programming company Diamond Sports, a move that would enhance the e-commerce giant's ambitious drive into sports entertainment.

The Wall Street Journal said that if an arrangement is made, Amazon's Prime Video platform will ultimately become the streaming home for Diamond's games.

Diamond, which owns the local rights to over half of the clubs in Major League Baseball and the National Basketball Association, as well as roughly a third of the teams in the National Hockey League, would continue to operate its cable networks through its existing relationships.

Read Also: Holiday Season Could Leave Luxury Retailers Drowning in Unsold Inventory

Diamond's Bankruptcy and the Shifting Landscape of Sports Broadcasting

Diamond, a Sinclair Broadcast Group company that operates regional sports networks (RSNs), filed for Chapter 11 bankruptcy protection in March. The corporation is now in court awaiting a ruling on Chapter 11 vs liquidation.

Diamond purchased the broadcasting rights to 42 MLB, NBA, and NHL franchises in a $9.6 billion agreement with Fox in 2019. However, in order to do so, the ailing RSN took on more than $8 billion in debt, which, along with general cable reductions, led to its March bankruptcy.

Amazon shares gained 3%, while Sinclair (SBGI) gained more than 2%. Sinclair Group likewise declined to comment, stating that it "doesn't comment on rumors and speculation."

Amazon, like other digital behemoths, has become more aggressive in terms of streaming arrangements in recent years, particularly in sports.

Amazon just introduced the first Black Friday NFL game. According to AdAge, the corporation charged $880,000 for a 30-second commercial spot, which is more than double the standard fee for Thursday Night Football games.

Amazon agreed to pay $1 billion per year for an 11-year NFL Thursday Night Football agreement, while Google's YouTube (GOOG, GOOGL) paid a reported $2.5 billion for NFL Sunday Ticket rights.

The agreements come as traditional media faces high streaming losses and significant drops in linear advertising income. Cord-cutting has escalated, with linear TV viewing falling below 50% in July for the first time.

As the negotiations unfold, the outcome could reshape the dynamics of sports broadcasting, underscoring the increasing influence of digital giants like Amazon in shaping the future of how audiences consume sports content. The intersection of Amazon's vast streaming ambitions and Diamond's expansive sports rights portfolio holds the promise of a compelling and transformative alliance in the ever-evolving sports entertainment landscape.

Related Article: US Inflation Fuels $100 Million Gold Rush at Costco, Bars Disappear in Hours